AML/ATF Regime: Border Reporting and New Sectors

Summary#

This Canada Gazette notice (published November 30, 2024) sets out proposed changes called the Regulations Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations. The rules would expand anti‑money‑laundering checks to trade at the border, let regulated firms voluntarily share information under privacy safeguards, require reporting of serious mismatches with the federal beneficial‑ownership registry, and add three business types (factoring, cheque‑cashing, financing/leasing) into the regulated system.

What it does#

• Trade reporting at the border

  • Requires traders to declare on import/export forms whether goods are proceeds of crime or related to money laundering, terrorist financing, or sanctions evasion.
  • Gives the Canada Border Services Agency (CBSA) the power to ask for records, seize or forfeit goods, and impose fines for reporting or record‑keeping breaches. Penalties can range from $1 to $500 in some low‑fault cases, or up to the value of the goods or the payment in other cases.

• Voluntary private‑sector information sharing

  • Lets businesses regulated under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) share certain personal and transactional information with each other to spot suspicious activity.
  • Requires participating firms to adopt a Code of Practice approved by the Office of the Privacy Commissioner of Canada (OPC) (approval timeline 90 days). Codes must be resubmitted every five years.

• Discrepancy reporting to the beneficial‑ownership registry

  • Requires regulated firms to report material mismatches they find — but only when they assess a high risk of money laundering or terrorist financing — to Corporations Canada, and keep a receipt of the report. Reports must be made within 15 days unless the discrepancy is fixed sooner.
  • “Material” excludes typos, minor address differences, and certain registry exceptions.

• New regulated sectors

  • Designates factoring companies, cheque‑cashing businesses, and financing and leasing entities as reporting entities under the PCMLTFA. That means these businesses would need compliance programs, client ID checks, record keeping, and certain transaction reports.
  • Key monetary thresholds included:
    • Large cash/virtual currency reporting: $10,000.
    • Cheque‑cashing ID and records: $3,000 or more.
    • Financing/leasing obligations target higher‑risk deals; consumer goods above $100,000 and passenger vehicles are included.
    • Factoring: maintain a receipt‑of‑funds record for payments of $3,000 or more.

• Timing and penalties

  • Most new requirements are planned to come into force on October 1, 2025. The voluntary information‑sharing framework is intended to come into force immediately when the final regulations are published in Canada Gazette, Part II.
  • The rules add categories of administrative monetary penalties for failures, with minor violations often penalized up to $1,000, and very serious cases carrying higher maximums (up to $500,000 in some examples for entities).

Who's affected#

• Businesses and sectors

  • About 272,060 traders, carriers, sufferance warehouses and customs service providers would be in scope of the trade reporting measure.
  • Around 25,497 existing reporting entities (banks, insurers, brokers, casinos, accountants, etc.) remain under the regime.
  • An estimated 865 new reporting entities would be captured, including the factoring, cheque‑cashing, and financing/leasing sectors.
  • Roughly 134,363 small businesses are expected to see some impact from the package.

• Government and regulators

  • CBSA, Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Corporations Canada, and the OPC would have new roles and some added costs to enforce and oversee the changes.

• People and customers

  • Clients of cheque‑cashing businesses (often underbanked or vulnerable people) may face ID checks for larger transactions ($3,000+).
  • Corporations that use the federal beneficial‑ownership registry could be the subject of discrepancy reports from banks and other regulated firms.

• Cost figures (estimated)

  • The government estimates a total present value cost of $74.3M over 10 years (about $10.5M per year). Small businesses are estimated to bear a combined present value cost of $51M, or about $3,077 annualized per affected small business.

Why it matters#

• Closes known gaps

  • Trade‑based money‑laundering (misinvoicing, phantom shipments) has been repeatedly flagged as a major risk. The CBSA would gain specific tools to detect and act on suspicious trade flows at the border.

• Improves detection and international standing

  • The package aims to improve how financial intelligence is gathered and shared, strengthen the federal beneficial‑ownership registry, and bring Canada closer to the Financial Action Task Force (FATF) standards ahead of Canada’s next FATF evaluation (in 2025–26). That reduces the risk of negative international listing and reputational harm.

• Privacy and oversight built in

  • The information‑sharing framework is voluntary and requires privacy safeguards and oversight by the OPC and FINTRAC, which the government says is intended to balance detection with individual privacy protections.

• Real‑world tradeoffs

  • Businesses—especially smaller firms—will face new compliance costs, record‑keeping, and possible fines for mistakes. Regulators will spend money and time to implement and supervise the new rules. The government argues these costs are justified by better prevention of money laundering, terrorist‑financing, and protections for the financial system; the RIAS notes many of those benefits are hard to put a dollar value on.

If you want, I can pull out the exact thresholds, penalty ranges, or the short list of obligations that would apply to a specific type of business (for example, cheque‑cashing stores or small leasing businesses).